The newly formed company - Liberty Global - will be one of the largest owners and operators of broadband communications systems outside the US with a share in companies serving more than 14m punters in 17 countries.

As part of the deal, Liberty Media International and UGC will become wholly-owned subsidiaries of Liberty Global. UGC is currently 53 per cent owned by Liberty Media International.

UGC operates in 14 countries with its networks connecting 15.5m homes and more than 11.1m subscribers including video, voice and broadband punters. Its largest operations are based in Europe and include UPC Broadband, which provides video, voice and data services to more than 10m customers in 11 countries. It also has interests in Chile and Australia.

LMI is a holding company owning interests in broadband distribution and content companies operating outside the US - principally in Europe, Asia and Latin America.

John Malone, LMI's Chairman, President and CEO, described the deal as a "merger of equals creating one of the largest broadband services companies outside the United States".

The merger still needs the green light from shareholders but is expected to be completed by the summer. ®